Poxviruses provide a unique experimental system for studying DNA replication. The ends of the linear double-stranded DNA genome consist of hair-pin structures that may resemble telomeres of eukaryotic chromosomes. Enzymes and other proteins needed for DNA synthesis are encoded within the viral genome and replication occurs in the cytoplasmic compartment of infected cells. During the previous year the DNA polymerase gene of vaccinia virus was completely sequenced and the primary structure of the enzyme was derived. Transcriptional analysis now indicates that the RNA start site is located 80 base pairs before the methionine codon initiating the open-reading frame. Further analysis of the DNA polymerase gene of a phosphonoacetate-resistant mutant virus revealed that a single nucleotide substitution changing glycine at amino acid 347 to aspartic acid results in drug resistance. This mutation may mark a part of the catalytic site of the enzyme. Studies on the mechanism of formation of the hairpin telomeres are continuing. Evidence has been obtained that the ends are formed by resolution of near perfect palindromes separating unit genomes in large concatemers. An in vivo transfection assay for the resolution reaction was developed and the minimal sequence requirement is being investigated. A search for origins of vaccinia DNA replication revealed that any plasmid that is transfected into cells infected with vaccinia virus is replicated. Although this phenomenon is specific for vaccinia virus infected cells, its signifcance is not understood.